Within a very short time, the private shopping club business has developed into a billion dollar market. Vente-Privée plans to turnover 800 million euro this year. Here in Germany, the various players could expect to turn over 300 million euro combined.
With big business at stake, you can almost visualize the wrangling happening these past weeks and months as top tier European private shopping clubs courted the Who’s Who of the American investor scene, including online retail giant Amazon.
Amazon to take over BuyVIP for 70 million euro
According to Spanish blog reports, which are yet to be confirmed, Amazon has taken over the private shopping club BuyVIP for 70 million euro, about half of what was expected by their investors. Techcrunch has summarized the relevant Spanish newspaper reports.
Due to their several management problems, BuyVIP can’t be counted as one of the strongest players in Europe. However there aren’t many options left for Amazon after the most attractive candidate, Vente-Privée, has repeatedly expressed no interest.
Besides Vente-Privée, according to our predictions last August (German link) Spain's Privalia, France's ShowroomPrivé and Spain's BuyVIP were the three private sales clubs having the best exit-option potential. The German Brands4Friends have more-or-less propelled themselves to the sidelines in the last months.
70 million euro for BuyVIP is certainly not an ideal valuation, particularly when considering the recent valuations of Gilt and Ruelala. However, one does recognize that exit options are getting thinner. Brands4Friends had previously been valued at 100 million euro.
Private shopping club Privalia raises 70 million euro warchest for acquisitions in Europe
Privalia announced a hefty capital injection of 70 million euro yesterday. The money will be used to fund acquisitions in Europe:
"Privalia, the leading private online sales club providing value for fashion brands and consumers, is pleased to announce today a EUR70 million ($95 million) financing.
The new funding will allow Privalia to leverage its international leadership position through potential M&A activity in Europe and to consolidate its market leading position in Latin America.
Privalia operates in the same order of magnitude (revenue-wise) as Brands4Friends, ShowroomPrivé and BuyVIP. Their goal is to reach a 2010 revenue level of 140 million euro.
The participants of the investment include some same investors as that of the US shopping club Gilt Groupe, indicating that Privalia may be a sort of European vanguard for Gilt.
In this regard, clearly BuyVIP has drawn the short straw, going for an apparently fire sale acquisition price to Amazon.
Who will be able to stand against the Vente-Privée behemoth?
The gears have been set in motion these past weeks. And the biggest winners to date are Spain’s Privalia, who have scored well with their South American strategy, as well as ShowroomPrivé, who have shown that even in France there is room for a second player. ShowroomPrivé raised 37 million euro investment (FR/EN) out of the US in August.
In contrast, the losers in this melee are Amazon and BuyVIP. If Amazon has indeed taken over BuyVIP, then both will have to live with sub-optimal solutions.
Completely on the wayside at the moment is the German Brands4Friends, who may have bet too high in this latest round of M&A poker.
The real excitment will begin if Gilt Groupe is able to pull in capital from an IPO.
Related posts:
- Vente-Privée on Amazon and eBay’s Radar
- Vente-Privée, Brands4Friends and BuyVIP: Breaking Revenue Records in 2009
- Gilt Groupe Exchanges CEO, Kevin Ryan Takes Over
- ShowRoomPrive Makes Number 2 Spot in France’s Private Shopping Club Scene
Originally posted in German as three posts (1, 2, 3) by Jochen Krisch, adapted for excitingcommerce.com by Jason Soo.
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